San Francisco, CA – A new housing report released by HotPads, a national housing search engine, finds that rental prices for two bedroom units grew 3.75 percent in 2011 while two bedroom units for sale saw a 1.83 percent drop in price across the top 20 most populated U.S. metros. (Jump to graphs)
Studio rentals remained the highest growth segment, with a 7.12 percent increase over the year. One and two bedroom rental properties also saw a price increase, 2.59 percent and 3.75 percent respectively, while three bedrooms dipped by .31 percent.
Popular metro areas like New York, Boston, Miami, San Francisco, Los Angeles, and Chicago had some of the most expensive rental listings in the U.S., as measured by median listing prices of two bedroom properties. Rental listings in San Francisco appeared in particularly high demand, staying active for just 28 days on HotPads, compared to an average of 49 days across other top metro markets.
Unlike rentals, homes for sale saw a further decline in 2011, sinking 1.83 percent across the largest metro areas, as measured by the median for sale listing price of two bedrooms on HotPads. A similar trend could be seen among the listed price of three bedroom homes for sale, which declined by 1.06 percent. In 2011 the most expensive two bedroom properties could be found in San Francisco, Los Angeles, and New York.
While we expect demand for rental properties to remain high throughout 2012, we anticipate a slower growth compared to last year. As the price of homes for sale continues to decline, we believe more home shoppers will consider buying over renting (buy vs rent data below). We also predict more foreclosed and long standing for sale properties will re-enter the market as rentals in 2012, which should increase the rental supply and help ease prices. However, if economic conditions extend consumer uncertainty, we may continue seeing would be home owners continue to rent.
The data in this report is calculated based on the median listing price of 500,000 concurrently active rental listings on HotPads across the top 20 most populated U.S. metros. For consistency, two bedroom properties were used to determine the rental and for sale year over year price changes. The Buy vs Rent ratio is calculated by dividing a metros median house price by annual rent. Higher ratios mean it is more expensive to buy than rent a comparable home. The 20 metro areas include major cities like Atlanta, Baltimore, Chicago, Dallas, Detroit, Houston, Los Angeles, Miami, Minneapolis, New York, Philadelphia, Phoenix, Riverside, San Diego, San Francisco, Seattle, St. Louis, Tampa, Washington, DC. ‘Metro Areas’ consist of a densely populated urban core and its less-populated surrounding territories, ex: “San Francisco-Oakland-Fremont, CA” and “New York-Northern New Jersey-Long Island, NY-NJ-PA”.
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